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A home for artists

The artist friendly Jac Flats condos at 18½ & Jackson were pulled off the market more than a year ago, but real estate agents still receive calls about the failed project.

The phones could start ringing off the hook. The nonprofit developer Artspace is trying to build a rental project in the same spot, with roughly the same design and the same live-work focus on artists.

Staff at Artspace are hoping the city’s recent approval of tax credits will give them a leg up on applications for future funding. Construction would likely start by early 2012, according to Artspace Senior Vice President Greg Handberg.

Back when the project was marketed as condos, shell units that artists could help design started as low as $89,000 for those who qualified. The Northeast Community Development Corporation (NE CDC) spent years on market studies, design charrettes and artist interviews to plan the perfect project.

“The CDC was pretty bold in taking on something as enormous as this, a $9 million project,” said Nick Legeros, a CDC board member.

The group raised $3 million for construction, and took over troublesome rental properties.

But their timing couldn’t have been worse.

“It’s a sad real estate story, but it’s also a representational real estate story,” said Karin Nord Martinek, a real estate agent who sold units for Jac Flats. “Five or 10 years ago, they could have thrown that sucker up with 10 commitments. Now, even if they had 90 percent, they couldn’t get the money.”

Jamie Schumacher, executive director of the NE CDC, said they backed off the project as the market soured.

“Because of the high costs to carry a project like this from start to finish it would have been imprudent to move ahead with a for-sale project knowing that the market was very weak and that the sale of the units would be difficult at best,” she said. “Housing values were falling rapidly, and it was getting harder for home buyers to qualify for purchase financing.”

To solve the problem, the NE CDC convinced Artspace in mid-2009 to help advance the project again. Handberg said the new design will feature slightly fewer units (from 41 down to 36), and more two- and three-bedroom units better suited for rental housing financing programs. Rent prices will target households that make 60 percent of the area median income or less. Handberg said artists could take advantage of apartments that are bigger than average, with flexible floor plans and an accommodating management style.

A common production space, an area that Martinek called the “dream” of the original project, is still in the plans.

“That was the most heartbreaking for [buyers] to give up on,” she said.

Handberg said the common space could be used for a gallery or production space, whatever best meets the residents’ and community’s needs.

Live-work housing is crucial for retaining artists, according to Laura Zabel, executive director of Springboard for the Arts, an artist resource center based in St. Paul.

“Lowertown is really the only neighborhood that has a substantial amount of live-work space,” she said. “It’s one of the only ways to create a sustainable neighborhood [for artists].”

Otherwise, she said, the trend seen in the Warehouse District crops up again and again, in which artists gentrify a neighborhood only to be priced out.

“My concern for Northeast is that it has the same dangers we see all across the country, that they could get pushed out,” Zabel said. “This [project] could really put a stake in the ground.”

Full-time Minnesota artists report an average income of $34,342, according to a 2007 study by Minnesota Citizens for the Arts. The study reported that more than 12,000 artists live in the metro area.

Josh Blanc, a tile artist who co-owns Clay Squared To Infinity, recalled an old Northeast survey that showed strikingly high artist homeownership here. He said Jac Flats could serve as a magnet for people across the country.

Martinek said that every buyer turned away from the former Jac Flats project has since found a home in Northeast. Financial regulations aren’t so tight that artists can’t tap into good loan programs, she said.

“The neighborhood is really well-suited for them,” she said. “The housing stock is great.” The old two-story homes offer lots of space to play with and plenty of good lighting, she said.

—At a glance: Jac Flats

What: Thirty-six new apartments aimed at artistsWhere: 18½ Avenue Northeast and Jackson Street NortheastWhen: Groundbreaking is expected by early 2012Who: A partnership between Artspace and the Northeast Community Development Corporation is developing the projectWhy: To create affordable live-work space for artists